Banco Santander, S.a. · BME:SAN
Banco Santander — H1 2020 Earnings Presentation
117 slides from Banco Santander's earnings presentation, Jul 30, 2020
Slide 1: H1'20 Earnings Presentation
29 July 2020 H1’20 Earnings Presentation All. Together. Now.
Slide 2: Important information
Important information Non-IFRS and alternative performance measures In addition to the financial information prepared in accordance with International Financial Reporting Standards (“IFRS”) and derived from our financial statements, this presentation contains certain financial measures that constitu
Slide 3: Important information
Important information Numerous factors could affect the future results of Santander and could result in those results deviating materially from those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in th
Slide 4: Index
Index 1 2 3 4 5 H1’20 Group Business Key Appendix Highlights performance areas review takeaways 4
Slide 5: Highlights
Highlights Stock continued to grow. Loans: +1% QoQ and +6% YoY, deposits +5% QoQ and +9% YoY Signs of normalisation of lending with mortgage and consumer new lending increasing in June and lending to SMEs and corporates reducing Growth from their peak in April Digital adoption accelerating rap
Slide 6: Strong net operating income performance, profit affected by COVID-19 provisions
We delivered strong net operating income performance (+2% in constant euros), though profit affected by COVID-19 related provisions % change Constant EUR mn H1'20 H1'19 Euros Euros Net interest income 16,202 17,636 -8 0 Resilient customer revenue even with lower business activity Net fee income 5,13
Slide 7: Net capital gains and provisions
Net capital gains and provisions H1’19 H1’20 Capital gains Prisma (Argentina) +150 Goodwill impairment -10,100 Restructuring costs -704 • UK: -6,101 • Spain: -600 • US: -2,330 • UK: -92 • Poland: -1,192 • Poland: -12 • SCF (Nordics and others): -477 Property sales (Corporate Centre) -180 Deferred ta
Slide 8: Capital ratios reinforced with Group CET1 of 11.84%
Capital ratios reinforced with Group CET1 of 11.84%, at the top end of our 11-12% target, after strong organic capital generation in the quarter CET1 ratio evolution (1) Accrual of 6 basis points in the quarter to allow the flexibility to pay a cash dividend against 2020 results, as soon as market c
Slide 9: Index
Index 1 2 3 4 5 H1’20 Group Business Key Appendix Highlights performance areas review takeaways 9
Slide 10: Group business activity
Group Performance Group business activity 10
Slide 11: Return to pre-COVID activity as lockdowns were lifted
In the latter part of the quarter, we gradually began to return to pre-COVID activity as lockdowns were lifted… % Branches open Peak lockdown June 78% 26% Nearly full operational activity in our: 77% 99% Lockdown Branches: c. 90% Group’s branches open Europe restrictions 69% 83% eased ATMs: full ava
Slide 12: Normalisation in new retail lending
… which is reflected in signs of normalisation in new retail lending in recent weeks, particularly in Europe… New Mortgage lending1 New Consumer lending1 (daily average, constant EUR mn) (daily average, constant EUR mn) 223 336 340 20 195 302 313 16 16 161 49 274 46 15 52 54 14 73 100 112 115 13 78
Slide 13: Corporate lending and CIB reduced from April peak
… while corporate lending, which has been supported by government guarantees, and CIB have reduced from their peak in April New SME and Corporates lending1 CIB change stock of loans (daily average, constant EUR mn) (L&A to customers excluding reverse repos, constant EUR billion) 1,061 121 989 +18.8
Slide 14: June new lending similar to pre-COVID levels
As a result, in June, the Group’s new lending was similar to pre-COVID levels Avg. Daily new lending1 (EUR mn) Lending Customer funds 1,409 1,725 1,630 1,446 +7% YoY 1,194 Group +6% YoY +1% QoQ +5% QoQ Feb Mar Apr May Jun 986 939 733 +4% YoY 607 602 Europe +3% YoY +1% QoQ +5% QoQ Feb Mar Apr May Jun
Slide 15: Stock of retail loans stable, SME, corporate and CIB increased
The stock of retail loans has remained stable while SME, corporate and CIB balances have increased 313 313 313 313 313 180 178 179 178 179 Mortgages 19 19 19 19 19 Consumer 19 19 19 19 19 (Stock of loans1) 17 17 17 17 17 (Stock of loans1) 38 38 39 39 40 277 277 277 277 277 123 121 121 120 120 Feb Ma
Slide 16: Digital adoption accelerated, digital sales 47% in Q2
Digital adoption has accelerated (mobile customers +5.8 mn YoY) resulting in increased digital sales penetration up to 47% in Q2 39.9 mn (+15% YoY) Steady growth in our digital customers: +3.1 mn in H1’20 Digital customers1 vs. +2.0 mn in H2’19 Strong engagement and digital sales: 47% in Q2’20 +27%
Slide 17: Group earnings
Group Performance Group earnings 17
Slide 18: Resilient revenue from customer relationships
In results, resilient revenue driven by our strong customer relationships… ... and our geographic… ... and business diversification Total income growth YoY (constant euros) South America +7% Corporate & Investment Banking +17% North America +1% Wealth Management & Insurance +4% Europe -8% 18
Slide 19: NII affected by non-business impacts and lower rates
NII affected by non-business related impacts and lower interest rates. NII from recurring business increased 4% in constant euros NII evolution Constant EUR mn +1,072 16,228 16,202 -480 -300 -318 H1'19 Volumes Rates Regulatory impacts Liquidity buffer H1'20 19
Slide 20: Fees affected by lower customer transactions
Fees affected by lower customer transactions but beginning to recover as activity increases Retail Banking 53% Wealth Management 31% SCIB 16% & Insurance Fee income YoY 1 -12% +1% +20% Activity growth1 -24% Apr-20/Apr-19 +1% YoY GTB2 +3% YoY PoS SAM (AuM) turnover +25% Jun-20/Apr-20 + 4% QoQ Private
Slide 21: Cost reductions ahead of plan
Cost reductions are ahead of plan as we capture incremental cost efficiencies YoY change Nominal costs Costs in real terms -10% -4% Accelerating the Europe -5.9% -6.8% -6% cost reduction trend -11% -5% in most markets North -4% Europe efficiencies achieved: America -0.8% -2.9% -1% >EUR 300 mn in H1’
Slide 22: Estimated year-end cost of credit of 1.4-1.5%
Estimated year-end cost of credit of 1.4-1.5% with credit quality supported by mitigation measures and volume increases Loan-loss provisions Credit quality ratios Jun-19 Mar-20 Jun-20 EUR bn Cost of credit 0.98% 1.17%1 1.26% +78% YoY NPL ratio 3.51% 3.25% 3.26% Coverage ratio 68% 71% 72% (1)Consider
Slide 23: Close to 80% of moratoria granted to individuals
Close to 80% of our moratoria is granted to individuals, o/w c. 90% secured # clients Total amount (mn) o/w government % lending 30 Jun 20 o/w government programmes portfolio programmes (EUR bn) ▪ c. 60% are residential mortgages, 0.5 69 23% Mortgages mainly concentrated in UK (c. EUR 41 0.3 55 bn)
Slide 24: Performance of expired moratoria
Performance of current expired moratoria, aligned with 2020 forecasted losses Maturity profile of loans subject to moratoria Residual maturity as of 30 June 20, EUR bn ▪ As of 30 June, c. 25% of the total moratoria had expired (c. EUR Mortgages 7 9 35 18 69 29 bn), of which 98% remains performing ▪
Slide 25: Index
Index 1 2 3 4 5 H1’20 Group Business Key Appendix Highlights performance areas review takeaways 25
Slide 26: Net operating income supported by geographic and business diversification
Group net operating income growth supported by our geographic and business diversification Underlying Net operating income attributable profit Contribution to Group’s H1’20 (vs. H1’19) (EUR mn) (EUR mn) Underlying profit 4,314 1,075 Europe 35% -10% -54% North 3,301 617 20% America +2% -29% South 5,0
Slide 27: Spain
Spain Europe main markets KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 33 +2 pp NII 931 0.6 1,856 -8.0 Net fee income 535 -16.8 1,178 -5.5 Digital customers (mn) 5.1 +10% Total income 1,562 -12.7 3,350 -9.6 NPL ratio (%) 6.55 -47 bps Operating expenses -896 -5
Slide 28: SCF
SCF Europe SCF main markets KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 NII 947 -2.0 1,926 2.5 Active customers (mn) 18.4 -3% Net fee income 159 -14.6 345 -16.3 NPL ratio (%) 2.52 +28 bps Total income 1,095 -5.4 2,266 -0.9 Operating expenses -469 -7.9 -983 -3.6 Cost of credit (%) 0.78 +4
Slide 29: UK
UK Europe main markets KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 31 +1 pp NII 871 -0.2 1,769 -7.7 Net fee income 96 -47.9 290 -31.6 Digital customers (mn) 6.1 +7% Total income 979 -8.0 2,077 -13.0 NPL ratio (%) 1.08 -5 bps Operating expenses -656 -5.3 -1,37
Slide 30: Brazil
Brazil South America main market KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 22 - NII 1,813 -3.4 4,083 1.0 Net fee income 614 -13.4 1,483 -1.5 Digital customers (mn) 14.5 +14% Total income 2,651 1.7 5,788 3.8 NPL ratio (%) 5.07 -20 bps Operating expenses -835
Slide 31: USA
USA North America KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 21 +2 pp NII 1,429 -2.4 2,891 -1.4 Net fee income 215 -14.0 465 -5.3 Digital customers (k) 1,052 +7% Total income 1,801 -6.7 3,730 -2.6 NPL ratio (%) 1.49 -83 bps Operating expenses -776 -4.1 -1,58
Slide 32: Mexico
Mexico North America KEY DATA H1'19 H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 35 +4 pp NII 650 -4.5 1,448 2.4 Net fee income 185 2.2 396 2.0 Digital customers (mn) 4.6 +31% Total income 905 4.7 1,912 7.6 NPL ratio (%) 2.50 +29 bps Operating expenses -341 -3.7 -756 2
Slide 33: Corporate Centre
Corporate Centre P&L* H1'20 H1'19 NII -658 -600 NII impacted by front-loading the 2020 issuance plan and an increased liquidity buffer Gains/Losses on FT 78 -171 Positive impact of FX hedging cost reflected in results Operating expenses -166 -193 from financial transactions LLPs and other provisions
Slide 34: Index
Index 1 2 3 4 5 H1’20 Group Business Key Appendix Highlights performance areas review takeaways 34
Slide 35: Key takeaways: net operating income growth and CET1 at top of target range
In the first half, we have grown our net operating income by 2% and CET1 to 11.84%, at the top end of our 11-12% target range We expect to remain at the top end of our 11-12% target range by year end Strong Given our capital strength and operating performance, the board intends to propose a scri
Slide 36: Index
Index 1 2 3 4 5 H1’20 Group Business Key Appendix Highlights performance areas review takeaways 36
Slide 37: Appendix
Appendix Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 37
Slide 38: Europe
Europe KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 36 +1 pp NII 3,352 -1.0 6,787 -4.3 Net fee income 1,098 -15.7 2,413 -8.0 Digital customers (mn) 14.7 +9% Total income 4,577 -6.9 9,551 -7.8 NPL ratio (%) 3.24 -24 bps Operating expenses -2,526 -5.7 -5,237 -5.
Slide 39: North America
North America KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 33 +4 pp NII 2,079 -3.1 4,339 -0.2 Net fee income 400 -6.9 860 -2.1 Digital customers (mn) 5.7 +26% Total income 2,706 -3.0 5,642 0.6 NPL ratio (%) 1.73 -56 bps Operating expenses -1,117 -4.0 -2,341 -0
Slide 40: South America
South America KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 25 -1 pp NII 2,606 -0.1 5,671 6.1 Net fee income 774 -13.2 1,847 -1.5 Digital customers (mn) 18.8 +15% Total income 3,690 4.0 7,854 7.0 NPL ratio (%) 4.74 -7 bps Operating expenses -1,275 0.7 -2,761 5.
Slide 41: Appendix
Appendix Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 41
Slide 42: Retail Banking
Retail Banking P&L* Q2'20 % Q1'20 H1'20 % H1'19 Activity NII 7,141 -2.5 15,026 -0.8 EUR bn and % change YoY in constant euros Net fee income 1,495 -18.9 3,518 -10.3 766 Total income 8,859 -4.5 18,831 -3.5 692 Operating expenses -4,084 -3.9 -8,611 -2.3 Net operating income 4,775 -4.9 10,220 -4.4 +4%
Slide 43: Corporate & Investment Banking
SCIB Corporate & Investment Banking Total income (Constant EUR mn) P&L* Q2'20 % Q1'20 H1'20 % H1'19 NII 713 14.1 1,384 12.1 2,726 +17% 2,336 167 -32% Net fee income 406 6.9 810 20.3 Capital & Other +45% Total income 1,426 17.9 2,726 16.7 927 Global Markets Operating expenses -507 -0.4 -1,043 -1.5 +1
Slide 44: Wealth Management & Insurance
Wealth Management & Insurance ACTIVITY EUR bn and % change in constant euros QoQ YoY P&L* Q2'20 % Q1'20 H1'20 % H1'19 NII 104 -17.8 236 -13.0 Total AUM 355 +5% 0% Funds and investments2 Net fee income 279 -8.9 599 9.8 216 +6% +1% Total income 482 -13.4 1,069 3.7 - Asset Management (SAM) 175 +4% +1%
Slide 45: Santander Global Platform
SGP continued deploying global payments solutions for SMEs and individuals, SGP incorporating new services and functionalities on schedule Enhance our competitive position in E-commerce (Getnet reached a market share of around 22% in Brazil) Global Merchant Further additional functionalities include
Slide 46: Appendix
Appendix Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 46
Slide 47: Portugal
Portugal Europe other markets KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 46 +1 pp NII 197 -2.3 399 -6.9 Net fee income 90 -11.0 191 -2.9 Digital customers (k) 866 +14% Total income 317 -9.4 668 -6.2 NPL ratio (%) 4.43 -57 bps Operating expenses -145 -4.2 -29
Slide 48: Poland
Poland Europe other markets KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 53 +1 pp NII 251 -11.3 547 -0.5 Net fee income 104 -7.2 220 -1.7 Digital customers (k) 2,635 +9% Total income 377 7.6 742 -6.6 NPL ratio (%) 4.57 +36 bps Operating expenses -143 -13.0 -31
Slide 49: Chile
Chile South America other markets KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 45 -1 pp NII 425 -3.3 873 8.9 Net fee income 74 -17.9 166 -2.3 Digital customers (k) 1,339 +15% Total income 584 7.8 1,137 6.3 NPL ratio (%) 4.99 +47 bps Operating expenses -228 0.9
Slide 50: Argentina
Argentina South America other markets KEY DATA H1'20 % H1'19 P&L* Q2'20 % Q1'20 H1'20 % H1'19 Loyal / active customers (%) 44 -3 pp NII 261 34.5 502 61.5 Net fee income 56 -3.6 132 -10.0 Digital customers (k) 2,557 +20% Total income 310 22.2 628 43.1 NPL ratio (%) 3.15 -64 bps Operating expenses -15
Slide 51: Uruguay and Andean region
Uruguay and Andean region South America other markets URUGUAY PERU COLOMBIA +14% +28% +127% 69 60 24 10 19 4 H1'19 H1'20 H1'19 H1'20 H1'19 H1'20 28% 19% 14% RoTE RoTE RoTE Increased volumes and activity reflected in profit growth and higher profitability Note: Underlying attributable profit in const
Slide 52: Appendix
Appendix Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 52
Slide 53: Highly liquid balance sheet with large contribution from customer deposits
Santander has a highly liquid balance sheet with a large contribution from customer deposits and diversified MLT wholesale debt instruments Liquidity Balance Sheet 1,234 1,234 Liquidity Coverage Net Stable Funding EUR bn, Jun-20 Ratio (LCR) Ratio (NSFR) Jun-201 Dec-19 Mar-20 Loans and 847 Customer S
Slide 54: MLT debt issued and maturity profile
In the year to date, the Group has issued EUR 26 bn1 of MLT debt and is able to cover its very manageable maturity profile Public market issuances in 2020 Maturity profile EUR bn, Jun-20 EUR bn, Jun-20 49.6 12.3 San S.A. 1.6 3.3 9.1 7.9 7.4 1.5 SCF 2.2 4.4 5.9 2.5 3.9 3.1 7.0 5.6 2020 2021 2022 2023
Slide 55: Interest rate risk and ALCO portfolios
We actively manage interest rate risk and our ALCO portfolios to optimise results while maintaining an appropriate risk profile Positive interest rate sensitivity in Europe ALCO portfolios reflect our geographic diversification Net interest income sensitivity to a +/-100 bp parallel shift Distributi
Slide 56: Issuances YTD against funding plan
Issuances YTD against funding plan 2020 Funding plan and issuances EUR bn, Jun-20 Covered Bonds + Senior Senior Non-Preferred Hybrids TOTAL Plan Issued Plan Issued Plan Issued Plan Issued Santander S.A 4-5 3.0 7-8 7.0 1-2 1.51 12-15 11.5 SCF 6-8 3.6 - 0.0 - 0.0 6-8 3.6 UK 6-8 4.8 2-3 0.8 - 0.0 8-11
Slide 57: CET1 management buffer increased to 298 bps
Regulatory changes in the last quarter, and increased capital levels, increased the Group’s CET1 management buffer to 298 bps SREP capital requirements (phased-in) CET1 management buffer2 Jun-20 15.48% 13.19% 2.00% T2 13.02% T2 1.64% AT1 2.00% 2.38% AT1 1.50% CCyB1 +189 bps +298 bps 0.19% 1.78% G-SI
Slide 58: TLAC ratios for the Resolution Group
TLAC ratios for the Resolution Group headed by Banco Santander, S.A. TLAC Ratio EUR mn Dec-19 Mar-20 Own Funds 91,294 91,550 • The TLAC ratio as at 31-Mar-20 increased by 75 bps to of which: Common Equity Tier 1 (CET1) capital 75,683 75,821 19.71%1 (compared to an expected year-end of which: Additio
Slide 59: Appendix
Appendix Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 59
Slide 60: Yield on loans (%)
Yield on loans (%) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 EUROPE 2.77 2.75 2.70 2.68 2.66 2.47 Spain 2.05 2.08 2.02 2.02 1.99 1.86 Santander Consumer Finance 4.51 4.48 4.41 4.26 4.27 4.17 United Kingdom 2.72 2.67 2.63 2.59 2.52 2.37 Portugal 1.79 1.76 1.71 1.64 1.63 1.56 Poland 4.14 4.15 4.17 4.17 4.04
Slide 61: Cost of deposits (%)
Cost of deposits (%) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 EUROPE 0.42 0.42 0.41 0.41 0.39 0.28 Spain 0.14 0.14 0.13 0.13 0.06 0.04 Santander Consumer Finance 0.60 0.61 0.60 0.58 0.57 0.53 United Kingdom 0.67 0.70 0.70 0.69 0.69 0.52 Portugal 0.14 0.12 0.10 0.10 0.08 0.06 Poland 0.89 0.89 0.78 0.74 0.
Slide 62: Appendix
Appendix Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 62
Slide 63: Loan-loss provisions. Geographic distribution
Loan-loss provisions. Geographic distribution Q1'20 Q2'20 H1'20 LLPs published Overlay fund Total LLPs Total LLPs Total LLPs EUR mn 253 375 628 313 941 172 145 317 184 501 49 142 191 239 430 5 75 80 24 105 68 28 95 89 184 646 327 972 832 1,804 228 46 273 291 564 709 358 1,066 843 1,909 107 56 163 18
Slide 64: Payment holidays and moratoria by geographic region
Payment holidays and moratoria – detail by geographic region Payment holidays and moratoria Customers Clients (k) (mn) EURbnbn EUR %%portfolio portfolio o/w gov o/w gov o/w gov 30 Jun 20 Total Total Total programmes programmes programmes Europe 1,0 0,3 72 51 11% 8% Mortgages 0,3 0,2 55 45 20% 17% Ot
Slide 65: Coverage ratio by stage
Coverage ratio by stage Exposure ¹ Coverage Jun-20 Mar-20 Jun-20 Mar-20 Stage 1 878 891 0.6% 0.6% Stage 2 61 53 7.7% 8.2% Stage 3 33 33 41.1% 40.8% (1) Exposure subject to impairment in EUR bn. 65 Additionally, customer loans not subject to impairment recorded at mark to market with changes through
Slide 66: NPL ratio (%)
NPL ratio (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 EUROPE 3.61 3.48 3.47 3.25 3.19 3.24 Spain 7.29 7.02 7.23 6.94 6.88 6.55 Santander Consumer Finance 2.33 2.24 2.25 2.30 2.43 2.52 United Kingdom 1.17 1.13 1.08 1.01 0.96 1.08 Portugal 5.77 5.00 4.90 4.83 4.56 4.43 Poland 4.39 4.21 4.35 4.31 4.2
Slide 67: Coverage ratio (%)
Coverage ratio (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 EUROPE 49.5 49.9 48.2 49.8 54.1 53.4 Spain 43.3 42.9 40.6 41.1 44.6 43.3 Santander Consumer Finance 105.3 105.9 104.2 106.1 109.6 106.1 United Kingdom 30.9 31.9 34.1 36.5 43.0 46.0 Portugal 50.7 52.9 51.5 52.8 59.0 60.9 Poland 67.6 69.7 69
Slide 68: Non-performing loans and loan-loss allowances by operating area
Non-performing loans and loan-loss allowances. Breakdown by operating areas. June 2020 Non-performing loans Loan-loss allowances Brazil, 11.3% Brazil, 17.2% Chile, 6.4% Spain, 27.4% Argentina, 0.5% Otros Sudamérica, 0.3% Chile, 4.8% Mexico, 2.6% Spain, 45.8% Argentina, 1.1% USA, 5.1% Otros Sudaméric
Slide 69: Cost of credit (%)
Cost of credit (%) Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 EUROPE 0.24 0.24 0.25 0.28 0.40 0.47 Spain 0.40 0.41 0.41 0.43 0.64 0.68 Santander Consumer Finance 0.38 0.36 0.38 0.48 0.66 0.78 United Kingdom 0.07 0.06 0.08 0.10 0.14 0.23 Portugal 0.03 0.03 0.00 (0.02) 0.23 0.30 Poland 0.61 0.66 0.71 0
Slide 70: Appendix
Appendix Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 70
Slide 71: More responsible and sustainable business
We continue to do business in a more responsible and sustainable way Culture Sustainability Engagement Women 86% of employees 40% Group Board >EUR 20 bn EUR 1 bn EUR 1 bn Leader mobilised in Green finance Santander first Santander second proud to work for Santander (+1 pp vs 2018) 23% Group leadersh
Slide 72: Santander Responsible Banking goals
Santander Responsible Banking goals We are building a more Responsible Bank aligned with our commitments 2018 2019 2020 2021 2025 Top 10 company to work for1 4 5 6 33% 33 40% Women on the Board 40%-60% Women in senior leadership positions2 20% 20 20% 23% 30% Equal pay gap3 3% 2% ~0% Financially empo
Slide 73: Appendix
Appendix Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 73
Slide 74: Santander Group (EUR mn)
SANTANDER GROUP (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 8,682 8,954 8,806 8,841 8,487 7,715 17,636 16,202 Net fee income 2,931 2,932 2,955 2,961 2,853 2,283 5,863 5,136 Gains (losses) on financial transactions and other 472 465 705 790 474 706 937 1,180 Total inc
Slide 75: Santander Group (Constant EUR mn)
SANTANDER GROUP (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 7,981 8,247 8,296 8,319 8,177 8,025 16,228 16,202 Net fee income 2,666 2,686 2,780 2,781 2,748 2,388 5,352 5,136 Gains (losses) on financial transactions and other 466 471 699 768 475 705 937 1,180
Slide 76: Europe (EUR mn)
EUROPE (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 3,561 3,580 3,530 3,531 3,435 3,352 7,141 6,787 Net fee income 1,327 1,304 1,310 1,319 1,315 1,098 2,630 2,413 Gains (losses) on financial transactions and other 337 304 455 443 225 126 642 351 Total income 5,225 5,1
Slide 77: Europe (Constant EUR mn)
EUROPE (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 3,536 3,555 3,539 3,495 3,410 3,377 7,091 6,787 Net fee income 1,323 1,300 1,314 1,312 1,309 1,104 2,623 2,413 Gains (losses) on financial transactions and other 338 304 455 442 226 125 642 351 Total income
Slide 78: Spain (EUR mn)
Spain (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 1,009 1,009 967 934 925 931 2,018 1,856 Net fee income 623 624 614 620 643 535 1,247 1,178 Gains (losses) on financial transactions and other 224 216 408 258 220 96 440 316 Total income 1,857 1,849 1,989 1,811 1,789 1
Slide 79: Santander Consumer Finance (EUR mn)
Santander Consumer Finance (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 941 971 977 960 979 947 1,911 1,926 Net fee income 214 201 213 195 187 159 415 345 Gains (losses) on financial transactions and other 13 (18) 14 30 5 (11) (5) (5) Total income 1,167 1,154 1,203 1,
Slide 80: Santander Consumer Finance (Constant EUR mn)
Santander Consumer Finance (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 925 954 961 949 973 953 1,878 1,926 Net fee income 213 200 212 194 186 159 413 345 Gains (losses) on financial transactions and other 12 (18) 14 29 6 (11) (5) (5) Total income 1,150 1,136
Slide 81: United Kingdom (EUR mn)
United Kingdom (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 975 944 908 961 898 871 1,919 1,769 Net fee income 216 207 217 226 193 96 423 290 Gains (losses) on financial transactions and other 15 32 (5) 33 6 12 46 18 Total income 1,206 1,183 1,119 1,220 1,098 979 2,38
Slide 82: United Kingdom (GBP mn)
United Kingdom (GBP mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 850 825 820 827 774 773 1,676 1,546 Net fee income 189 181 195 194 166 87 370 253 Gains (losses) on financial transactions and other 13 28 (4) 29 5 10 40 16 Total income 1,052 1,034 1,011 1,050 946 870 2,086
Slide 83: Portugal (EUR mn)
Portugal (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 216 213 214 213 202 197 429 399 Net fee income 98 99 96 98 101 90 197 191 Gains (losses) on financial transactions and other 44 42 22 21 47 30 86 77 Total income 357 354 331 332 350 317 712 668 Operating expenses (
Slide 84: Poland (EUR mn)
Poland (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 281 284 298 307 296 251 565 547 Net fee income 113 117 119 117 116 104 230 220 Gains (losses) on financial transactions and other (18) 39 24 34 (48) 23 22 (25) Total income 377 440 442 459 365 377 817 742 Operating e
Slide 85: Poland (PLN mn)
Poland (PLN mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 1,209 1,216 1,288 1,317 1,279 1,134 2,425 2,413 Net fee income 488 499 514 504 503 467 987 970 Gains (losses) on financial transactions and other (76) 168 104 147 (206) 95 92 (111) Total income 1,622 1,883 1,906 1,96
Slide 86: Other Europe (EUR mn)
Other Europe (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 139 159 166 155 134 155 299 289 Net fee income 62 56 52 63 74 115 118 189 Gains (losses) on financial transactions and other 60 (7) (8) 68 (6) (23) 53 (29) Total income 261 209 211 286 202 246 469 448 Operating
Slide 87: Other Europe (Constant EUR mn)
Other Europe (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 140 160 167 155 134 155 299 289 Net fee income 62 57 53 63 74 115 119 189 Gains (losses) on financial transactions and other 61 (7) (8) 68 (6) (23) 54 (29) Total income 263 210 211 286 202 246 472 448
Slide 88: North America (EUR mn)
NORTH AMERICA (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 2,173 2,230 2,259 2,265 2,261 2,079 4,403 4,339 Net fee income 439 463 448 427 461 400 901 860 Gains (losses) on financial transactions and other 142 226 277 257 214 228 368 442 Total income 2,753 2,918 2,983
Slide 89: North America (Constant EUR mn)
NORTH AMERICA (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 2,158 2,189 2,203 2,193 2,204 2,135 4,347 4,339 Net fee income 430 448 432 409 445 415 878 860 Gains (losses) on financial transactions and other 150 230 280 254 215 227 380 442 Total income 2,738 2,8
Slide 90: United States (EUR mn)
United States (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 1,407 1,453 1,460 1,449 1,462 1,429 2,860 2,891 Net fee income 234 244 238 230 250 215 479 465 Gains (losses) on financial transactions and other 174 222 278 215 217 157 396 374 Total income 1,815 1,920 1,977
Slide 91: United States (USD mn)
United States (USD mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 1,598 1,633 1,623 1,604 1,612 1,573 3,231 3,185 Net fee income 266 275 264 255 275 237 541 512 Gains (losses) on financial transactions and other 197 250 310 238 239 173 447 412 Total income 2,061 2,158 2,198
Slide 92: Mexico (EUR mn)
Mexico (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 766 777 798 816 798 650 1,543 1,448 Net fee income 204 218 210 197 211 185 423 396 Gains (losses) on financial transactions and other (32) 4 (1) 42 (2) 70 (28) 68 Total income 939 999 1,007 1,054 1,007 905 1,938 1,91
Slide 93: Mexico (MXN mn)
Mexico (MXN mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 16,703 16,694 17,231 17,393 17,484 16,706 33,397 34,190 Net fee income 4,455 4,695 4,535 4,188 4,617 4,719 9,149 9,336 Gains (losses) on financial transactions and other (687) 83 (31) 906 (51) 1,658 (604) 1,607 Total
Slide 94: South America (EUR mn)
SOUTH AMERICA (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 3,222 3,425 3,314 3,356 3,065 2,606 6,647 5,671 Net fee income 1,178 1,178 1,204 1,228 1,074 774 2,355 1,847 Gains (losses) on financial transactions and other 88 45 59 130 25 311 132 336 Total income 4,487 4,
Slide 95: South America (Constant EUR mn)
SOUTH AMERICA (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 2,561 2,783 2,850 2,941 2,837 2,834 5,344 5,671 Net fee income 925 950 1,041 1,074 989 858 1,875 1,847 Gains (losses) on financial transactions and other 73 47 50 112 24 312 120 336 Total income 3,559
Slide 96: Brazil (EUR mn)
Brazil (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 2,459 2,520 2,560 2,534 2,270 1,813 4,979 4,083 Net fee income 931 924 970 974 869 614 1,855 1,483 Gains (losses) on financial transactions and other 21 9 (7) 57 (3) 224 30 221 Total income 3,411 3,453 3,522 3,565 3,
Slide 97: Brazil (BRL mn)
Brazil (BRL mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 10,516 11,095 11,272 11,534 11,100 10,725 21,611 21,825 Net fee income 3,980 4,070 4,271 4,429 4,250 3,679 8,050 7,929 Gains (losses) on financial transactions and other 91 41 (31) 254 (14) 1,196 132 1,182 Total inco
Slide 98: Chile (EUR mn)
Chile (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 440 500 462 464 448 425 940 873 Net fee income 103 97 102 102 92 74 200 166 Gains (losses) on financial transactions and other 56 59 82 71 12 85 115 98 Total income 600 656 646 638 553 584 1,255 1,137 Operating expens
Slide 99: Chile (CLP mn)
Chile (CLP mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 333,439 383,545 363,195 386,260 397,015 384,057 716,985 781,072 Net fee income 78,010 74,473 80,052 85,052 81,770 67,170 152,483 148,940 Gains (losses) on financial transactions and other 42,713 45,387 63,719 58,999 1
Slide 100: Argentina (EUR mn)
Argentina (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 213 298 180 250 241 261 511 502 Net fee income 116 125 88 118 76 56 241 132 Gains (losses) on financial transactions and other 2 (33) (31) (8) 1 (8) (31) (6) Total income 331 389 237 359 318 310 720 628 Operating
Slide 101: Argentina (ARS mn)
Argentina (ARS mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 10,117 14,548 18,638 19,924 16,991 22,846 24,665 39,837 Net fee income 5,486 6,131 8,976 9,403 5,327 5,132 11,616 10,459 Gains (losses) on financial transactions and other 102 (1,596) (2,372) (847) 89 (595) (1,494
Slide 102: Other South America (EUR mn)
Other South America (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 109 108 112 108 106 107 217 213 Net fee income 29 32 44 34 37 29 60 65 Gains (losses) on financial transactions and other 8 9 16 10 14 9 17 24 Total income 146 149 172 153 157 145 295 301 Operating expen
Slide 103: Other South America (Constant EUR mn)
Other South America (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 93 96 100 101 102 110 189 213 Net fee income 24 28 40 32 35 30 52 65 Gains (losses) on financial transactions and other 7 9 14 10 14 10 16 24 Total income 125 132 154 142 151 150 257 301 Operati
Slide 104: Santander Global Platform primary segment (EUR mn)
SANTANDER GLOBAL PLATFORM primary segment (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 22 23 23 23 31 32 46 63 Net fee income 2 1 2 2 13 18 2 31 Gains (losses) on financial transactions and other (5) (4) (1) (7) 1 (6) (9) (5) Total income 19 20 24 18 45 44 39 89 Opera
Slide 105: Corporate Centre (EUR mn)
CORPORATE CENTRE (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income (296) (304) (319) (333) (304) (354) (600) (658) Net fee income (14) (13) (9) (15) (9) (6) (27) (15) Gains (losses) on financial transactions and other (90) (106) (85) (34) 9 47 (196) 56 Total income (399) (
Slide 106: Retail Banking (EUR mn)
RETAIL BANKING (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 8,083 8,323 8,227 8,229 7,885 7,141 16,406 15,026 Net fee income 2,178 2,134 2,108 2,141 2,024 1,495 4,312 3,518 Gains (losses) on financial transactions and other 150 201 485 339 63 224 351 287 Total income
Slide 107: Retail Banking (Constant EUR mn)
RETAIL BANKING (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 7,458 7,693 7,747 7,750 7,606 7,419 15,150 15,026 Net fee income 1,973 1,947 1,978 2,002 1,943 1,575 3,921 3,518 Gains (losses) on financial transactions and other 192 242 491 343 81 206 434 287 Tota
Slide 108: Corporate & Investment Banking (EUR mn)
CORPORATE & INVESTMENT BANKING (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 654 700 657 716 671 713 1,354 1,384 Net fee income 352 374 421 373 404 406 726 810 Gains (losses) on financial transactions and other 272 217 153 337 225 307 489 532 Total income 1,278 1,292 1
Slide 109: Corporate & Investment Banking (Constant EUR mn)
CORPORATE & INVESTMENT BANKING (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 596 638 636 681 646 738 1,234 1,384 Net fee income 326 347 397 356 392 419 673 810 Gains (losses) on financial transactions and other 235 193 150 322 213 319 428 532 Total income 1,15
Slide 110: Wealth Management & Insurance (EUR mn)
WEALTH MANAGEMENT & INSURANCE (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 141 143 141 146 132 104 284 236 Net fee income 273 298 298 330 320 279 571 599 Gains (losses) on financial transactions and other 110 121 113 114 134 100 231 234 Total income 523 562 551 589 58
Slide 111: Wealth Management & Insurance (Constant EUR mn)
WEALTH MANAGEMENT & INSURANCE (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 135 137 141 142 130 107 272 236 Net fee income 261 285 288 316 313 285 545 599 Gains (losses) on financial transactions and other 102 112 105 105 130 104 214 234 Total income 497 534 5
Slide 112: Santander Global Platform secondary segment (EUR mn)
SANTANDER GLOBAL PLATFORM secondary segment (EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 100 92 100 83 103 112 192 214 Net fee income 142 139 137 132 115 109 280 224 Gains (losses) on financial transactions and other 30 32 40 34 43 29 62 72 Total income 271 263 277 24
Slide 113: Santander Global Platform secondary segment (Constant EUR mn)
SANTANDER GLOBAL PLATFORM secondary segment (Constant EUR mn) Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net interest income 89 84 92 79 99 115 172 214 Net fee income 120 120 126 122 109 115 240 224 Gains (losses) on financial transactions and other 28 30 39 33 42 30 57 72 Total income 236 233
Slide 114: Appendix
Appendix Primary segments Secondary segments Other countries. Detail Balance sheet and capital management Yield on loans and cost of deposits NPL and coverage ratios and cost of credit Responsible Banking Quarterly income statements Glossary 114
Slide 115: Glossary - Acronyms
Glossary - Acronyms ❑ AuM: Assets under Management ❑ M/LT: Medium- and long-term ❑ RoTE: Return on tangible equity ❑ BFG: Deposit Guarantee Fund in Poland ❑ mn: million ❑ RWA: Risk-weighted assets ❑ bn: Billion ❑ MXN: Mexican Pesos ❑ SBNA: Santander Bank NA ❑ CET1: Common equity tier 1 ❑ n.a.: Not a
Slide 116: Glossary - Definitions
Glossary - Definitions PROFITABILITY AND EFFICIENCY ✓ RoTE: Return on tangible capital: Group attributable profit / average of: net equity (excluding minority interests) – intangible assets (including goodwill) ✓ RoRWA: Return on risk-weighted assets: consolidated profit / average risk-weighted asse
Slide 117: Thank You.
Thank You. Our purpose is to help people and businesses prosper. Our culture is based on believing that everything we do should be: